Meituan adds ride-hailing feature to take on Didi

Can an O2O giant leverage its network to challenge Didi Chuxing?

Didi and Uber’s billion-dollar merger completed last August was assumed to have finally settled for the ride-hailing war with Didi ends up the sole dominator in the Middle Kingdom.

However, the peace brought by the truce between world’s two largest ride-summoning services is short lived as well-grounded local rival Meituan has announced they are entering the battlefield. On Tuesday, China’s top O2O titan Meituan added a car-hailing function into its app, which now features a wide variety of services from food delivery, film tickets, hotel reservation and flight/train tickets.

After finding the ride-hailing service in Meituan’s home page, users in Nanjing can book their trips in an interface and operation process very similar to Didi’s. Payments can be made with bank cards, WeChat or QQ Wallet.

Meituan’s entrance into the ride-hailing industry is quite unexpected given that the internet giant is mainly focused on local lifestyle services. The company has kept a low profile when talking about the new service, only explaining to local media that the feature was added to fulfill rising demand from users.

Meituan has plans to spread the service to more cities, but hasn’t released a timetable for the expansion.

Meituan, now more commonly known as Meituan-Dianping after its merger with once competitor Dianping, has some tricks up its sleeves in competing with the already established players led by Didi.

Meituan-Dianping now claimes to be the third largest e-commerce platform in China, next only to Alibaba and JD. The company has recorded a combined app download of 180 million with active users hitting 220 million, who contributes to a daily peak order of 13 million. This huge user base is expected to bring traffic to the service.

Additionally, nearly all the services that Meituan provides is directly related to intercity transportation services. This could enable an easy transition from one service to another within the app.

Last year, Meituan’s legendary CEO and Chinese internet opinion leader Wang Xing, put forward a proposition that Chinese internet is entering the “Second Half”, believing that “. . . only deep integration can lead to full transition [from the first to the second half].”

Integrating ride-hailing services could be considered in line with the proposition to penetrate other related services. In addition, the company has acquired Qiandai, a third-party payment startup, to make inroads into online payment sector.